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Question 1 : The following information pertains to: PolyCable Sdn . Bhd . Sales RM 4 5 0 0 0 0 Variable Costs ( 2

Question 1: The following information pertains to:
PolyCable Sdn. Bhd.
Sales RM450000
Variable Costs (280000)
Contribution Margin RM170000
Fixed Costs (75000)
EBIT RM95000
Interest Expenses (25000)
Earning Before Taxes RM70000
Taxes (21000)
Net Income RM49000
1. What is the BEP for PolyCable?
2. Calculate the degree of operating leverage at this level of output for PolyCable.
3. Calculate the degree of financial leverage at this level of output for PolyCable.
4. What is the combined leverage for PolyCable.
5. If sales increases by 10%, what will be the new level of PolyCables EPS if the firm has 100000 shares outstanding?

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